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What If All The AI Spending Never Pays Off?
What if all the AI spending doesn't pay off?
That's the question no one wants to ponder currently, caught up as we all are in a hype cycle for the ages.
A few brave souls are willing to "go there" (so to speak). Just a few days ago, for example, SocGen's Albert Edwards asked if AI spend might be seen, in hindsight, as analogous to "over-investment in cabling by the Telecoms in the late 1990s."
I think the answer's "no," but the figure below's worth a highlight all the same.
Down there at t
Kinda like a nuclear arms race in which neither superpower can afford to be left behind, none of the hyperscalers can afford to be left behind in case there is a breakthrough application for accelerated computing. Multimodal inferencing from unstructured data,(sound, video, text etc.) will require the highest level of processing power dispelling the popular fantasy that inferencing can be done with cheaper chips/infrastructure. Therefore, the demand for NVIDIA’s Blackwell chips appears insatiable through 2025.
As a guy who’s put in a lot of time trying to make actual practical use of AI’s, the fact that they can’t even be trusted to make accurate statements of fact is beyond concerning. I feel like people are looking at this and saying, “look, it’s a machine that can understand me and talk back! It must be smarter than me!” When the truth is, it’s a machine that has been taught to string words together in syntactically likely combinations, that’s all. I literally saw a post today on LinkedIn of someone saying, and a bunch of people enthusiastically agreeing, that LLMs give better results if you are polite to them and regularly say “thank you”. One person says he welcomes it by telling if he has made a virtual cup of coffee for it and insists this improves his results. Another insisted that by telling it to play the role of an interviewer it can improve your interview prep… Because, obviously, any process that can string random words together into a sensible sentence must logically have a firm understanding of what interviewers are looking for. Then there was the job counselor who told me I should invest $40 in an AI generated professional headshot for LinkedIn. Instead, I invested zero dollars in photoshopping an existing photo of myself, and when he saw it, without realizing it I hadn’t sprung for the AI service, he loved it. This is the uncritical attitude with which these things are being approached. I wonder how long this can go on before somebody notices the emperor isn’t wearing any clothes.